Energy, Environment, Resources

For quite a while, the British electricity market (in itself, an interesting case of successful liberalisation) has been the object of a campaign aiming at its re-regulation. Now it is the turn of the British Competition & Markets Authority (the... MORE

How can a practical case also be a moral case? Simple: if one's standard of value is human life, as Epstein says his is, then whatever enhances human life is moral. There are some problems around the edges of his... MORE

In recent decades, the Republican Party has moved to the right on some issues, notably immigration. More recently, the Democrats have moved left on issues like trade, fiscal stimulus and the minimum wage. And taxes, as the following story illustrates:... MORE

Why was the proposed wind farm not built off the coast of Cape Cod? It was stopped by "environmentalists". Why don't we have high speed rail up and down the northeast corridor? "Environmentalists" won't allow it. Of course the real... MORE

I didn't think there was anything more to say about infamous doomsayer Paul Ehrlich. Until he decided to justify his career to the New York Times. Background:No one was more influential -- or more terrifying, some would say -- than... MORE

A friend recently recommended Russ Roberts's Econtalk episode in which he interviews climatologists John Christy and Kerry Emmanuel in front of a large audience at the University of Alabama in Huntsville. I listened to it and followed along with the... MORE

Apparently we are supposed to be worried about fracking depleting water in California. ThinkProgress reports that Despite Historic Drought, California Used 70 Million Gallons Of Water For Fracking Last Year. Similar concerns are raised by RT, Huffington Post, and even... MORE

Jerry Taylor of the Niskanen Center, who co-authored an excellent piece, "Energy," in The Concise Encyclopedia of Economics, has a post titled "Oil and Gas Industry Opinions about Climate Change." He writes: My colleague Sarah Hunt pointed out yesterday that... MORE

Arnold Kling has a post pointing out that anti-science attitudes are not confined to the right. He starts by quoting Jonah Goldberg: Why does the Left get to pick which issues are the benchmarks for "science"? Why can't the measure... MORE

What's the best undergraduate environmental econ textbook? Constraints:1. It has to be engaging enough to hold the attention of someone who isn't taking an environmental econ course.2. It should have decent empirics on the cost-savings of taxes and tradable permits... MORE

Alex Epstein, author of The Moral Case for Fossil Fuels, replies to my criticism and questions over at Forbes.com. Overall, I'm dissatisfied with his responses. Here's why, point by point. Alex is in blockquotes, I'm not. I'll address some of... MORE

Noah Smith writes: And while our use of natural gas and coal doesn't feed the coffers of unsavory regimes like Russia and Saudi Arabia the way our use of oil does, it's still the case that these energy sources are... MORE

Many minarchists, most notably Ayn Rand, believe their minimal state should be funded by voluntary taxation. As Rand puts it:In a fully free society, taxation--or, to be exact, payment for governmental services--would be voluntary. Since the proper services of a... MORE

Both Obama and the WSJ are wrong: The WSJ is more wrong. Here's an excerpt from the Wall Street Journal's Review and Outlook (unsigned) editorial, "Obama on Oil Markets: Supply and demand seem to be elusive concepts," on President Obama's... MORE

Everything I've written about The Moral Case for Fossil Fuels, my favorite book this year:1. The thesis.2. We owe civilization to fossil fuels.3. We can live with warming.4. Refining the case.The book's a great Christmas present, all the way down... MORE

The Moral Case for Fossil Fuels is the best book I've read all year, and makes a great holiday gift. But there's still room for improvement.1. Epstein centers his moral case around "human life as the standard of value." This... MORE

Rolling Stone (ahem) includes Alex Epstein, author of The Moral Case for Fossil Fuels, on its list of top "global warming deniers." Epstein:[T]hose who dispute catastrophic global warming are accused of denying the greenhouse effect and global warming. I experienced... MORE

According to this popular cartoon, getting rid of fossil fuels is a free lunch.The wise will roll their eyes at this wishful thinking. But no one exposes its sheer absurdity better than Alex Epstein in The Moral Case for Fossil... MORE

When Alex Epstein's The Moral Case for Fossil Fuels arrived in my mailbox, I expected it to be bad. For two reasons:1. In my experience, readable books about climate change usually just demagogically preach to the choir.2. I correctly surmised... MORE

Krugman's bashing gets in the way of clear thinking. In his most recent New York Times column, "Pollution and Politics," Paul Krugman fluctuates between claiming one doesn't need to do the analysis and actually doing the analysis. The issue: the... MORE

UPDATE: I made an important mistake. Robert Murphy corrected me in an e-mail. Correction below. Robert P. Murphy, one of the economists who writes frequently for Econlib, has published a number of pieces on the "tax interaction effect." He has... MORE

I flew into the Corpus Christi airport late last night and waited in line for my rental car. Behind me was a young dark-skinned man who appeared to be from India and he was shouting in a foreign language--Hindi, I... MORE

This is my final installment from "The Unintended Case for More Capitalism," my review of Capital in the Twenty-First Century by Thomas Piketty. Piketty, not to his credit, sometimes uses ad hominems in place of actual argument. I note two.... MORE

I've posted before (here and here) about the John Cook study that purports to find that 97% of climate scientists believe that humans are the main cause of global warming. Now Richard Tol, a professor of the economics of climate... MORE

Writing at Forbes.com (for whom I am also a contributor), William Pentland discusses Lockheed Martin's alleged breakthroughs in fusion technology. We've heard "fusion is just around the corner!" for a very long time now, but as Tyler Cowen notes, this... MORE

Earlier this week, I posted a 1983 memo that I wrote to my boss at the Council of Economic Advisers, Martin Feldstein, about a meeting to discuss relaxing the limits on exports of Alaskan oil. Below is a follow-up memo... MORE

Last week, I posted here and here about Larry Summers's excellent talk in which he advocated removing the ban on U.S. oil exports. I then remembered that when I was the Senior Economist for Energy Policy with President Reagan's Council... MORE

Yesterday, I posted about Larry Summers's excellent speech making the case against government restrictions on exports of oil and natural gas. It was getting overly long and so this is Part II. I'll start by highlighting, and responding to, the... MORE

A few weeks ago I did a post pointing out that pundits on both the left and the right have moved further to the extremes, and away from sensible policy views. I just noticed another example today, an article... MORE

I believe that the question of whether the United States should have a substantially more permissive policy with respect to the export of crude oil and with respect to the export of natural gas is easy. The answer is affirmative.... MORE

Scott Sumner writes: I recall that when liberals favored lots of "command and control" regulation to address global warming, and conservatives favored a carbon tax. That was the "market solution" comparable to the market-based approach to reducing sulfur emissions from... MORE

A simple economic truth is that water-price hikes can get the job done without the expense--and the inefficiency--of conservation ads and water police--as well as the discord that can arise when neighbors snitch on and shame each other. Also, people... MORE

The title of this blog post is the same as the title of one of my chapters in The Joy of Freedom: An Economist's Odyssey. In that chapter, I show how private ownership of resources leads people to take better... MORE

In honor of of the estimable Mike Munger's 25th appearance (!!) on EconTalk, I thought I'd offer a couple of words about what's probably my favorite Munger EconTalk podcast: "Munger on Recycling," from July 2, 2007. Here's his accompanying article... MORE

Who caused the August 1990 spike in oil prices? If you learned that someone had reduced the supply of oil substantially just before the spike, wouldn't you think that that someone caused the price increase? You might think that I'm... MORE

One of the blogs that I check literally every day is Timothy Taylor's "Conversable Economist." In baseball parlance, his posts are virtually always doubles, triples, or home runs. A recent home run is his "Evaluating Low-Carbon Energy Alternatives." In it,... MORE

If I were convinced that the fate of mankind hinged on massive reductions in carbon emissions, I would still be pessimistic about unilateral taxes or cap-and-trade. As I told Yoram:National emissions regulations can have perverse global effects. If relatively clean... MORE

Yoram and I have digitally shaken on our global warming pause bet. Via Twitter: @bryan_caplan yes, once we clarify concerns of @wonkinakilt You're betting avg(2015-2029)-avg(2000-2014)<=0.05C, yes? If so I accept!-- Yoram Bauman (@standupecon) June 10, 2014... MORE

The Cato Institute's Randal O'Toole has recently released a Policy Analysis arguing that low-capacity light rail is a bad deal for cities. I found it especially interesting in light of Scott's post last week on "private affluence and public squalor,"... MORE

The Economist confirms that global warming has paused over the last 15 years:Between 1998 and 2013, the Earth's surface temperature rose at a rate of 0.04°C a decade, far slower than the 0.18°C increase in the 1990s. Meanwhile, emissions of... MORE

While there's much to like in Yoram Bauman's Cartoon Introduction to Climate Change, this page nicely captures my reservations about his approach: He's tolerant of economically illiterate action, but intolerant of economically literate inaction. (Click to enlarge).[Excerpted from The Cartoon... MORE

Here's another page from The Cartoon Introduction to Climate Change that's worth more than all the demagogic words spoken about pollution taxes. Now in stores. Click to enlarge.[Excerpted from The Cartoon Introduction to Climate Change by Grady Klein and Yoram... MORE

One of my frustrations when reading Paul Krugman's blog is that I often get the feeling that I'm not reading a post by an economist. We economists tend to talk about relative prices, how prices motivate behavior (incentives), etc. Krugman... MORE

Last Spring, a student came to my class wearing a shirt reading "Basketball Never Stops." I need to get a shirt that says "Economics Never Stops." David's recent post on uncertainty and global warming was a good reminder. Public policy... MORE

In a recent response to Byran Caplan on global warming, Yoram Bauman rested part of his argument against cost/benefit analysis on the issue of uncertainty. Bauman wrote: Reason #1 is that CBA has trouble dealing with uncertainty: if there's a... MORE

In his latest reply to co-blogger Bryan Caplan, Yoram Bauman writes: If more economists like Bryan were upfront about their agreements with basic climate science then I would feel better about not having time to respond to people like David... MORE

I offered to give Yoram the last word in our exchange. Here it is.P.S. Yoram's non-fiction graphic novel officially releases on June 5. That week, with his kind permission, I'll be posting a few pages from his book. Normal 0... MORE

Here is my (delayed) rejoinder to Yoram's response to my review of his Cartoon Introduction to Climate Change. He's in blockquotes, I'm not.As with most academics, Bryan keeps his words of praise to a minimum and instead focuses on criticisms.... MORE

Los Angeles Times reporter Brian Bennett, in the first paragraph of a recent news story, writes: Sen. Marco Rubio of Florida, a GOP star and possible 2016 presidential contender, does not believe human activity is causing climate change, he said... MORE

UPDATE BELOW Co-blogger Bryan has graciously published Yoram Bauman's response to Bryan's critique of his The Cartoon Introduction to Climate Change. As Bryan notes, he will not be able to get around to responding to Yoram soon, and so I... MORE

Yoram Bauman, co-author of The Cartoon Introduction to Climate Change, asked to respond to my review. I'm about to go to my parents' golden anniversary party, so I probably won't respond until late next week.Here's Yoram: Normal 0 MicrosoftInternetExplorer4 Response... MORE

Stand-Up Economist Yoram Bauman is back with another non-fiction graphic novel, The Cartoon Introduction to Climate Change. As with his previous Cartoon Introductions to Economics (micro and macro), there is much to like. Bauman thoughtfully interweaves physical science and economics. ... MORE

Recently, I've been rereading parts of Cormac Ó Gráda's Famine: A Short History. The book juxtaposes an interesting pair of facts. The first fact describes how famine is marketed (for lack of a better word): The sense that the horrors... MORE

Paul Krugman has a strange post on solar power that contradicts basic microeconomics. He writes: Like just about everyone who has looked at the numbers on renewable energy, solar power in particular, I was wowed by the progress. Something really... MORE

Recently, a lack of wind and rain has inflicted unusually high smog levels on Paris. On Monday, March 17, Paris combatted the dangerously high levels of pollution by barring cars with even-numbered license plates from the roads. The intent was... MORE

David Friedman has lately been picking apart a piece written by Yale University's Bill Nordhaus in the New York Review of Books two years ago. I did so in my class on Energy Economics two years ago, drawing on this... MORE

In 1966, Paul Ehrlich visited India to study butterflies. This trip provided a perfect rhetorical device to help his readers imagine the dangers of overpopulation. He was able to describe his firsthand reaction to Delhi: As we crawled through the... MORE

UPDATE BELOW Mark Bahner, a commenter on my previous post on global warming and on David Friedman's post, has sifted through the data behind John Cook's statement that 97% of climate scientists who stated a position believe that humans are... MORE

As David Friedman points out, it is hard for us who are not climate scientists to know what is true or false about global warming. But one thing we can sometimes do is check what various writers on climate science... MORE

Co-blogger Bryan wrote an excellent post yesterday, "Sitting on an Ocean of Talent," in which he compared people's actual opposition to major increases in immigration to their supposed lack of opposition to producing a hypothetical precious resource named Leonium. As... MORE

UPDATE BELOW 2nd UPDATE BELOW Reason science correspondent Ron Bailey, in the January 2014 issue of Reason, digs into how the Intergovernmental Panel on Climate Change (IPCC) deals with the fact that the globe has not warmed for the past... MORE

Last Friday, I highlighted Ross McKitrick's exposition of the argument that taking account of the "tax interaction effect" (TIE) leads to the conclusion that the optimal Pigovian tax on carbon is less, and possibly substantially less, than the one that... MORE

If you have paid much attention to the debate about carbon taxes, you know that there is a "Pigou Club," of which Harvard economist Greg Mankiw is a founding member, and that these members advocate a tax on carbon.... MORE

We live on a heavily-wooded suburban lot in Hoover, Alabama, just outside of Birmingham, surrounded by neighbors and a very short drive from Samford. Periodically, we'll roast hot dogs over sticks and branches we find in the yard (see "heavily-wooded")... MORE

Which is more polluting--driving a mile to work or walking that mile? The easy answer is, of course, driving. Cars have tailpipes; people don't. Far more energy is needed to push a 3,000-pound car along the road than is needed... MORE

Why has the little nation of Qatar spent 3 billion dollars to support the rebels in Syria? Could it be because Qatar is the largest exporter of liquid natural gas in the world and Assad won't let them build a... MORE

Patrick J. Michaels and Paul C. "Chip" Knappenberger have figured out a marvelously clever way of showing the effects of various levels of carbon reduction on the temperature 2050 and by 2100. They use a term called "climate sensitivity" and... MORE

This is Bob Murphy's testimony on the optimal carbon tax, given Thursday, July 17, 2013. It's excellent. His written testimony is here. The best my Senator, Barbara Boxer, chair of the committee, came up with was to attack not... MORE

Here's an extra credit assignment I gave my principles of macro students last week when we were talking about supply and demand. Fans of Russell Roberts might recognize that this is inspired in part by chapter 1 of The Invisible... MORE

What should be done to increase the growth rate of the sluggish U.S. economy? This is the main issue that economists Robert Litan and Carl Schramm address in their book, Better Capitalism. The book is mistitled. As valuable as many... MORE

In the latest issue of Regulation magazine is a symposium on carbon taxes. The lead article is by Bob Litterman and then four authors, including me, responded. Here's an excerpt from my piece. On two other issues, I disagree with... MORE

The June issue of Cato Unbound features a lead essay on recycling by Mike Munger and, so far, response essays from Edward Humes, Melissa Walsh Innes, and Steven Landsburg. As of right now, there are also "conversation" essays from Mike... MORE

Back in 2009, I posted three pieces on Steven D. Levitt and Stephen J. Dubner's book Superfreakonomics. As with their first book, there were strengths and weaknesses. I highlighted them here, here, and here. I never posted, though, on their... MORE

Ronald Coase famously advised economists to "look out the window" every so often. It's advice I (try to) take to heart. Here's an example. On Monday afternoon, I was standing behind our building waiting for a few people and "enjoying"... MORE

I was pleased to see my old friend Ben Haller challenging me in the comments on my global warming econometrics bleg. He's in blockquotes, I'm not:The more crap you throw into the regression, the more it will be overfit and... MORE

What happens if you regress annual global temperature 1880-2011 on CO2, linear trend, and other stuff trending positively or negative over this era? The list of regressors should ideally include not just other climatological variables, but placebo variables like church... MORE

When I teach my Energy Economics course, in the first problem set, one of the problems is the following: Name an energy activity that the government is currently engaged in that you think should be eliminated and give your reasons... MORE

A friend of mine recently found a link to a video that a man named Jim Turney did of a talk I gave in Monterey in February 1991. It's at the annual convention of the Libertarian Party of California. The... MORE

Reader warning: If you do not "do" nuance, then please don't read this post and especially don't comment. On this 10th anniversary of the U.S. government's invasion of Iraq, there have been many articles assessing the war. I wrote a... MORE

I'm spending a large part of my day writing a book review of Daron Acemoglu and James A. Robinson's Why Nations Fail. Given the main theme of the book, which I like to focus on in reviews, I can't find... MORE

Here are three, all good news, more possible:1. QE3, all hail Scott Sumner. The ECB's unconventional easings to banks and sovereigns deserve mention as well. Perhaps someone will make a lot of money betting on high average inflation in the... MORE

Last week, I received an e-mail from the son of a friend of mine. The son is a student at a school in the Northeast. Here's the relevant part of the e-mail: I took a globalization class this past semester... MORE

Earlier this week, Robert Murphy, a frequent writer of Econlib Feature Articles, had an excellent critique of a piece on global warming by David Frum. Were I to quote all the good parts, I would end up quoting almost the... MORE

I was working Sunday on a talk I'm giving on October 23 in Dallas on Obama's economic policies. One thing I had taken as given, having talked to a few people who I thought had followed the issue closely, is... MORE

I promised in yesterday's post to cover the parts of Victor Davis Hanson's article that dealt with other aspects of California. Immigration aside, I found myself agreeing with a number of them and wanting to extend some. 1. Gas prices.... MORE

Steve Sexton over at Freakonomics has an excellent piece on shale gas. It lays out some basic economics beautifully. Before I continue, a disclosure: I have invested in a fracking operation in Colorado. I wish I hadn't, but that's another... MORE

Just about every public discussion of carbon tax swaps implicitly assumes that the distortions emanating from the tax code must decrease if the government begins taxing a negative externality (carbon emissions) and uses the revenue to reduce tax rates on... MORE

But the historian must look deeper. Was Enron really a free-market, capitalistic company even when its apparent self-interest lay elsewhere? Or were profit centers dependent on tax subsidies, advantageous regulation, or checks written on the U.S. Treasury? Was Enron passive... MORE

I think that bad economic policy, not "overpopulation," is India's main economic problem. But whatever you think about the social effects of population growth, it's clear that Indian fertility is sharply declining. I expect this rapid decline to continue, but... MORE

Last month I received this e-mail from a student I taught in the Spring quarter at the Naval Postgraduate School: Today my [deleted so as not to identify the instructor] instructor pointed out that there was a transfer of wealth... MORE

Holman Jenkins has hit a home run with his analysis in today's Wall Street Journal of the CAFE (Corporate Average Fuel Economy) mess. It's titled "GM Faces Its Own Regulatory Cliff." I've written about this here, here, here, and here.... MORE

Andrew P. Morriss and Donald J. Boudreaux have an excellent piece in today's Wall Street Journal, which, by the way, has several excellent pieces. (More on that in posts later today.) It's titled "A Coca-Cola Solution to High Gas Prices."... MORE

The experience with sanctions on Iran suggests some of the difficulties. In that case, the internal group likely to benefit most from sanctions is the Pasdaran, or Revolutionary Guards, which, coincidentally, may also prove to be the group most in... MORE

Robert Murphy has a first-rate piece on global warming in which he covers some important new ground. First, here's ground he and I (in a post on his earlier article) have already covered but he says it particularly well: Yet... MORE

In March, I had a post about William Nordhaus's article in the New York Review of Books, an article in which he responded to claims by 16 scientists who are global warming skeptics. That post gave rise to a lot... MORE

The Nazis were eugenicists and Malthusians (see Mein Kampf, chapter 4). They wanted to murder "the inferior" because they were convinced there wasn't enough food to go around. The Malthusianism told them that millions had to die; the eugenics told... MORE

If resources are not fixed but created, then the nature of the scarcity problem changes dramatically. For the technological means involved in the use of resources determines their creation and therefore the extent of their scarcity. The nature of the... MORE

"Let's make our demand for gasoline even more inelastic." Other economists suggest a gasoline tax that would increase as gasoline prices fall toward a predetermined floor and decrease as pump prices rise above it. This way, OPEC countries would be... MORE

In a recent article in the New York Review of Books, Yale University economist William Nordhaus presents a graph showing changes in global mean temperatures from 1880 to 2011. Take a look. The data appear to be annual and he... MORE

The ever-productive Bob Murphy, a regular at Econlib Feature Articles, has a good article today on "L'Affair[e] Heartland." In it, he reminds the reader to read Megan McArdle's excellent reporting on the issue. One excerpt: Not only did McArdle keep... MORE

If the Department of Energy is to be believed, weekly gasoline demand has fallen 7% on average from a year ago, to its lowest level since 2001. But few market observers believe it. The Energy Information Administration's weekly report on... MORE

[E]arth's climate was not designed for us, hence there is no a priori reason to assume that large negative results due to a few degrees of warming are more likely than large positive ones. This is from David Friedman's latest... MORE

Oil prices aren't high right now. In fact, they are unusually low. Gasoline prices would have to rise by another $0.65 to $0.75 per gallon from where they are now just to be "normal". And, because gasoline prices are low... MORE

In the Journal of Economic Perspectives, Paul Joskow writes, a sensible deployment strategy is to combine a long-run plan for rolling out smart-grid investments with well-designed pilots and experiments. Using randomized trials of smart grid technology and pricing, with a... MORE

Cato Institute scholars Peter van Doren and Jerry Taylor write that President Obama is not responsible for the spiraling price of gasoline. They correctly blame the price increase on the increase in the price of oil. They focus on the... MORE

MIT Technology Review reports, By the end of the decade, manufacturers in the United States could make solar panels that are less than half as expensive as the ones they make now. Would that be so impressive? Compared with Moore's... MORE

I'm sitting in my hotel room in Chiang Mai, Thailand watching The O'Reilly Factor. I might as well have been watching Amy Goodman's Democracy Now! The content was almost indistinguishable. O'Reilly and Dobbs were saying that Obama should be taking... MORE

As the NBER web site points out, February 12 is the birthday of economists Eugen Bohm-Bawerk and Julian Simon. Here is the bio of Bohm-Bawerk in The Concise Encyclopedia of Economics. One highlight from that bio: Böhm-Bawerk was also one... MORE

An even more serious problem concerns the restructuring of the original Solyndra loan guarantee, a move that placed new, private investors at the front of the line in the event of a default. The result was that the government's (i.e.,... MORE

On Thursday evening, Feb. 9, I'll be giving a public talk at the University of Rochester in Rochester, New York. It will go from 7:30 to 9:00, with ample time during that time period for Q&A. The talk is titled:... MORE

At The Atlantic. The U.S. Department of Energy, for example, estimates that small and environmentally friendly hydro-electric projects could generate at least 30,000 MWs of power annually. That's equivalent to the generating capacity of about 30 nuclear power plants. Moreover,... MORE

The blogger at The Oil Drum writes: We are dealing with a large number of countries with very different energy intensities. The big issue would seem to be outsourcing of heavy manufacturing. This makes the energy intensity of the country... MORE

Joshua Gans writes, What interested me more was the growing evidence that solar energy might be subject to a Moore's Law rate of improvement. According to Ramez Naam in Scientific American, the cost of solar photovoltaic models has been falling... MORE

In my executive MBA class yesterday, the one I do by video teleconference, I covered Bob Murphy's piece on oil prices as an application of some of the economics of futures markets. One part of Murphy's article that I highlighted... MORE

He would champion the Drill-Baby Carbon Tax. On one side, there would be a national commitment to move ahead with all deliberate speed in developing the vast U.S. fossil fuel energy resources that are now technologically available. On the other... MORE

Timothy Taylor writes, The single most costly trade barrier concerns rules against importing ethanol. The fact that such rules exist at all, of course, strongly suggests that the key issue in ethanol policy is not how much gasoline we can... MORE

After about a 3-week hiatus, David Friedman is blogging again. And the first one he did after starting is excellent. It's on global warming. Here's the opening paragraph: The argument for large and expensive efforts to prevent or reduce global... MORE

I'll be on KQED-FM (San Francisco) on Friday, September 2 sometime between 9:00 and 10:00 a.m. (PDT). The topic? Solyndra, the welfare-receiving corporation that suspended operations yesterday and plans to declare bankruptcy. UPDATE: Well, when it came to policy, it... MORE

Today is the 40th anniversary of President Nixon's announcement of price controls on the American economy. He imposed an immediate freeze on all wages and prices that lasted for 90 days. Then he went through the various phases of control,... MORE

The WSJ reports, Energy Secretary Steven Chu came out swinging Friday against a House bill that would repeal a 2007 federal law effectively outlawing older forms of incandescent bulbs... "We are taking away a choice that continues to let people... MORE

Do you think that if the U.S. government doesn't take on more debt in August, it will have to raise taxes, cut spending, use the Ron Paul/Dean Baker solution of having the Federal Reserve Bank extinguish government bonds, or default... MORE

Michael Lind on the abundance of fossil fuels. Jason Collins on Oded Galor's theory of population, genetics, and economic growth. More on Galor from Tyler Cowen. Megan McArdle on the failure of Obamacare to enlist the uninsured with pre-existing conditions.... MORE

Last week, I received a request from the Union of Concerned Scientists to sign a letter asking the government to impose even higher miles-per-gallon standards on cars. The letter explains: Last year, the Environmental Protection Agency (EPA), the National Highway... MORE

My target essay at this month's Cato Unbound is up. From the intro:People have been fretting about the "population problem" for at least fifty years. But over those five decades, the perceived problem has practically reversed. From the sixties to... MORE

In the comments on my post on sustainability, commenter Bill referenced a talk by Bob Solow in 1991. It's quintessential Solow. The talk has his trademark sense of humor and his trademark clarity. A few of his points: 1. Like... MORE

As I mentioned in an earlier post, my university is big on "sustainability;" it has just been having an extended event designed to boost the idea. I responded to an email urging faculty members to introduce sustainability into one of... MORE

"To rely upon a reserve requirement for the meeting of cash-withdrawal demands of banks' customers is analogous to trying to protect a community from fire by requiring that a large water tank be kept full at all times: the water... MORE

Tim Carney writes, Environmental policy is not driven by tree-hugging activists, earnest liberal bloggers, or ecologically minded citizens. Instead, it flows from the lobbyists and executives of well-connected multinational corporations and built-for-subsidy startups that see profit in the loan guarantees,... MORE

Blogger and GMU economics professor Don Boudreaux has challenged blogger and Berkeley economics professor Brad Delong to a bet. Brad has turned down the bet and proposed his own bet, a bet that Don has not accepted. It seems to... MORE

From "Good on Taxes, Bad on Trade," my review of Glenn Hubbard's and Peter Navarro's book, Seeds of Destruction in the latest Policy Review: The strongest chapter, by far, is the one titled, "Why You Can't Stimulate Your Way to... MORE

When I watched The Road, it seemed nearly apolitical. At the most abstract level, you could take it as a defense of Hobbes against Locke. But it's hard to see how liberals, conservatives, libertarians, or anyone else would see it... MORE

When writing my previous post on my own experience with stakes in betting, I couldn't find a bet that I had thought I offered. Now I have. In a Red Herring article in June 1998, at http://www.davidrhenderson.com/articles/0698_inmemoriamjuliansimon.html, "In Memoriam: Julian... MORE

There's a lot of discussion on this blog on raising the stakes. For the record, I offered to bet Paul Krugman $1,000, in a Simon-Ehrlich kind of bet, on the future price of oil. He didn't respond. (See http://www.davidrhenderson.com/articles/0297_isthereanewdigital.html and... MORE

Dan Klein and David Hedengren have a piece at Cato on economists signing petitions. One of their basic findings is how little overlap there is between the group of economists who sign anti-freedom petitions and the group who sign pro-freedom... MORE

Since there's a lot of interest in my case against high-IQ misanthropy, here's a fuller discussion from Selfish Reasons to Have More Kids:You Don't Have to Raise the Average to Pull Your Weight Eighty percent of success is showing... MORE

Terry Hazen, a microbial ecologist at the Lawrence Berkeley National Laboratory who published a groundbreaking study of microbial activity Tuesday in the online research journal Science Express, has had a team of researchers out in the Gulf since May 25... MORE

CNBC quotes Peter Beutel, I honestly think that if there were no investors using oil as an asset that the price of oil right now would be $10 or $15 or $18, but it wouldn't be anywhere near where it... MORE

The sole purpose of this post is to retweet two of Tyler Cowen's assorted links. 1. How to tell when a CEO is lying. I was expecting to click through and read, "His lips are moving," but in fact it... MORE

Steven Landsburg writes, How many grapes were sacrificed by growing that California tomato in a place where there might have been a vineyard? How many morning commutes are increased, and by how much, because that New York greenhouse displaces a... MORE

First, the Environmental Protection Agency can relax restrictions on the amount of oil in discharged water, currently limited to 15 parts per million. In normal times, this rule sensibly controls the amount of pollution that can be added to relatively... MORE

The latest announcement about U.S. industrial policy says, Abengoa SA... was offered a $1.45 billion loan guarantee by the U.S. Department of Energy to build a 250-megawatt solar plant in Arizona, and Abound Solar Manufacturing was offered a $400 million... MORE

Ed Glaeser writes, Consider the purely hypothetical case of a massive oil spill in the Gulf of Mexico. The traditional libertarian would argue that regulation is unnecessary because the tort system will hold the driller liable for any damage. But... MORE

Tyler makes a strong case that libertarians should take "the new food pessimism" seriously:The Julian Simon-savvy crowd that reads MR might not be so impressed, but I wouldn't write off these worries so quickly... Note that agriculture and land markets are... MORE

While reading Schkade and Kahneman's "Does Living in California Make People Happy?," I was shocked to discover the paper's underlying agenda:The original motivation for this study concerned the accuracy with which people could predict the effect of a specified change... MORE

Steven Hayward says that American environmentalism is in steep decline:In 1990, according to an ABC News/Gallup survey series, 75 percent of Americans said they considered themselves to be environmentalists, with only 24 percent saying they did not. The numbers have... MORE

When Mount Pinatubo erupted in 1991, I don't think I even heard about it. But this one event depressed global temperatures by about 1 degree Fahrenheit. Given all the attention the latest volcano's getting, I thought the predicted effect might... MORE

Like me, Tyler Cowen often believes that people's beliefs are irrational and their motives are expressive. But unlike me, he doesn't think that low stakes are an important reason for these tendencies. In fact, he delights in the counter-intuitive view... MORE

In a comment on Bryan Caplan's post today, Steve asks: Could someone please provide a distillation of Simon's work? The link is to his website, where all I can find is a list of published papers. I gave such a... MORE

I posted last week on Andrew C. Revkin's and John M. Broder's New York Times news story, to show how clever journalists can bias the reader at every turn. In today's local Monterey County Herald appears an Associated Press news... MORE

The option of geo-engineering makes it much safer to continue using fossil fuels and thereby pass on extra trillions of dollars of wealth to the next generation at possibly little or even no cost. So writes Robert Murphy in the... MORE

If you want to see a great example of a purported news story in which the reporters try to bias the story one way, check out today's New York Times story on Climategate. I preface this by saying that I... MORE

I've written about it before, but Wired reminds me, Startup companies that enjoy DOE support, most notably Tesla Motors and Fisker Automotive, have an extraordinary advantage over potential competitors since they have secured access to capital on very cheap terms.... MORE

Bill Easterly is not of fan of military nation-building in Afghanistan. He writes, critics of top-down state plans for economic development are also not fans of top-down state plans for military development. If the Left likes the first, and the... MORE

Lately my colleague Dan Klein has presented new evidence that the "invisible hand" was more central to Adam Smith's thought that most scholars now believe. Perhaps that's why this passage from Will and Ariel Durant jumped out at me. It's... MORE

Nick Rowe compares and contrasts climate science with macroeconomics. After listing some similarities, he turns to differences. D1. Macroeconomists are trying to explain people; climate scientists aren't. People are harder to explain. In particular, people's behaviour depends on what they... MORE

I have begun reading Startup Nation, a book about Israeli entrepreneurialism. Unfortunately, the first anecdote is about an attempt, requiring huge capital commitments and considerable government intervention, to create an infrastructure for electric cars. The idea is to build a... MORE

The Dominion Post reports The eco-pawprint of a pet dog is twice that of a 4.6-litre Land Cruiser driven 10,000 kilometres a year, researchers have found. Thanks to a reader for the pointer (no pun intended).... MORE

I'm heading for Yosemite later this afternoon. My goal: get to the top of Half Dome. I made it almost the whole way last year. If I get to the cables (in this picture from the web--that's not me; that's... MORE

Back in February, I posted an enthusiastic entry on the TV show, "Lie to Me." I enjoy the show, although I'm not sure how scientific the basis is for detecting whether a person's lying based on movements of eyes, mouth,... MORE

A reporter called me to give the "anti" side of the case for going "green." It's not hard. It is a matter of basic economics. 1. Suppose that a gallon of gas costs $2.50 and an hour of labor costs... MORE

Econlog is a blog devoted to economics education. So here's a quote from a recent book. Being producers, the advisory group was more concerned with increasing production--for instance, by opening up the Arctic to more development--which would presumably increase its... MORE

Today, Paul Krugman's New York Times column is one that I don't hate. I don't love it either, but it actually has some strengths as well as weaknesses. Strengths Krugman writes: Yes, limiting emissions would have its costs. As a... MORE

Vermont Public Radio reports, [Robert] Kuttner says the first red herring about single-payer health care is that it limits choice for the patient, and if you want proof look at Medicare. Indeed, Medicare does very little to restrict patients' access... MORE

EconLog readers will already be familiar with geoengineering. Now Obama's science advisor says the idea on the table:John Holdren told The Associated Press in his first interview since being confirmed last month that the idea of geoengineering the climate is... MORE

Highly Recommended. Back in September, when Congress was getting to ready to vote on TARP, I was in a Congresswoman's office arguing futilely against it. One of my lines was that I thought that most people were more adversely affected... MORE

In an otherwise good article in Friday's Wall Street Journal, "How Can Greens Make Themselves Less White?", Journal writer Naomi Schaefer Riley fails to make a telling point against Democratic Rep. James Clyburn. Riley points out that Clyburn is trying... MORE

The latest issue of The Freeman: Ideas on Liberty carries two articles written or co-authored by me. The first, "Was Money Really Easy Under Greenspan?," by Jeff Hummel and me, goes after the view that Greenspan conducted a loose monetary... MORE

In today's Wall Street Journal, Laura D'Andrea Tyson has a defense of "Obamanomics." At least that's the title the Journal gave it. The article is worth looking at for a number of reasons: 1. In discussing President Obama's spending plans,... MORE

In Catherine Rampell's list of sectors that had the greatest sales growth last year, I was struck by how many of them are energy-related. Assuming that farming was driven by ethanol, the top four sectors were essentially oil plays. Oil... MORE

In coastal California, where I live, various cities have weekly publications that are distributed at a zero price, have a cutting-edge, vaguely (sometimes explicitly) leftist slant, and almost always are uncritically "environmentalist." They rarely take on any policy that most... MORE

My favorite Wall Street Journal columnist, Holman W. Jenkins, Jr., has another good column today on how the Corporate Average Fuel Economy law hampers the Detroit-based auto companies (note: not the U.S. auto industry.) Jenkins points out that in an... MORE

I think people make the worst cases for their policy proposals when they write or speak as if they think there is no credible intellectual argument against their position. A case in point is a column in today's New York... MORE

He writes, Rather than a bailout, free the Big Three. Dump CAFE altogether and replace it with an honest and surely more efficient energy tax. Mr. Obama could transcend stalemates and end the 30-year-old fraud of our CAFE fuel-economy rules.... MORE

Louis Gerstner writes Abolish all local school districts, save 70 (50 states; 20 largest cities). Some states may choose to leave some of the rest as community service organizations, but they would have no direct involvement in the critical task... MORE

Unfortunately, or fortunately, depending on how you look at it, presidential campaign years give us economists a lot of "teaching moments," that is, chances to educate the public about basic, important economic truths. This campaign year is no different. I... MORE

Yesterday I had two lucky breaks at the gas station. First, they cut the price while I pulling up to the pump. Second, a delivery man was refilling the station's tanks, which gave me a chance to ask him some... MORE

I would love to see this question asked at a Presidential debate: If half of the troubled mortgage loans are for non-owner-occupied homes, that is for houses owned by speculators, do your proposals still make sense? My understanding is that... MORE

Noted energy economist James Hamilton just spoke at GMU. The two most interesting things he said: 1. OPEC has almost no effect on world oil prices; most countries produce less than their quota, and when countries want to produce more,... MORE

When I was writing my New York Times column on the gas tax, my editor pushed me to argue that other economists were underestimating the price-sensitivity of the supply of gasoline. I resisted. A wide range of economists seemed to... MORE

At Cato Unbound, Jim Manzi argues for low-cost solutions to climate change. Joseph Romm makes the case that we are headed for catastrophe if we do not do anything. My sense is that over the past year, the debate has... MORE

Robert Higgs writes, If we were talking about bananas, everybody would see immediately the foolishness of seeking banana independence. Nobody would fall for half-baked arguments about our addiction to foreign bananas or our love affair with banana bread. Its obviously... MORE

He suggests that there are no limits to growth. In a special issue of the American Economic Review about thirty years ago, some physical chemists wrote that once the energy problem is solved, nothing is scarce. If material X is... MORE

People seem to be searching harder for bargain gas prices. But according to search theory, the reason to search is price variation, not price. On closer examination of pump prices, though, I want to retract my observation that gas price... MORE

Here's something you wouldn't expect Richard Posner to write:I wonder, too, whether the recent decline in U.S. gasoline consumption doesn't represent to some degree an irrational panic reaction. To take a huge loss on the sale of your SUV in... MORE

Justin Wolfers says that current price of oil is a better predictor of future oil prices than oil futures markets:And it turns out that they all do worse than one simple forecast: the current oil price. That’s right: the most... MORE

Kevin Bullis writes, Over the past couple of weeks, T. Boone Pickens, an oil tycoon, has been using some of his billions to run television ads supporting...what seems to be the biggest wind farm in the country. It would nearly... MORE

From David Evans. The signature of an increased greenhouse effect is a hot spot about 10km up in the atmosphere over the tropics. We have been measuring the atmosphere for decades using radiosondes: weather balloons with thermometers that radio back... MORE

Tyler Cowen asks, Over the two previous days oil fell $10.50 a barrel. By definition this is driven by news about supply and demand but has so much news come out so quickly? Maybe the news is that the political... MORE

McKinsey folks write, During the next three to seven years, solar energy’s unsubsidized cost to end customers should equal the cost of conventional electricity in parts of the United States (California and the Southwest) and in Italy, Japan, and Spain.... MORE

New York Mercantile Exchange futures prices actually go out 8 years, and show little decline during that period. As my colleague John Nye suggested this morning, though, a flat nominal price for 8 years with 3% inflation implies a 20%... MORE

I've rarely gained any leverage with Tyler by pointing out his inconsistencies. But I can't resist. Take a look at his first book, In Praise of Commercial Culture. Despite his recent post, this book happily used Julian Simon's refutation of... MORE

Tyler has an especially edifying post on resource scarcity. Most interesting point raised:It's amazing how much, on this issue, some people resort to what can only be called technical analysis -- inferring future price movements from past trends -- when... MORE

In chapter 1 of The Selfish Reason to Have More Kids, I'm going to spend a little time discussing the largely imaginary problem of increasing resource scarcity. I knew the general pattern from folks like Julian Simon, but I wanted... MORE

James Hamilton writes, The "fundamentals" price of oil depends on a number of factors that cannot be perfectly foreseen. Among these are (1) will the world enter a deep and prolonged recession in 2007, and (2) will global oil production... MORE

Early in 2007, the price of oil was $60 a barrel. Recently, it has been above $130 a barrel. Which of the following does Paul Krugman believe: (a) market fundamentals justified $60 a barrel then, and they justify $130 a... MORE

Near the end of a "tiny theoretical paper," Paul Krugman writes, the actual data we have on crude oil don’t show the signatures of a market driven by speculative demand. Inventory data don’t show a big accumulation; and the market... MORE

1. A big sign saying that due to the increase in "drive-offs," customers using cash now have to pay in advance. 2. A big sign telling customers that the station will soon adopt a discount for cash (and the Texaco... MORE

During the last energy crisis in the 70s, adults talked a lot about fuel efficiency. Kids often asked, "If gas costs more, why don't you just drive faster?" Adults usually responded, "You actually burn more gas that way." And then... MORE

The Guardian reports James Hansen, one of the world's leading climate scientists, will today call for the chief executives of large fossil fuel companies to be put on trial for high crimes against humanity and nature, accusing them of actively... MORE

Oil is sold on world markets, and the dollar is now very weak. What would the dollar price of gas be today, if the dollar were as strong as it was back in 2002? Here's a back-of-the-envelope calculation (gas price... MORE

The Times (London) reports on a start-up that is using genetically altered bacteria to produce oil, “Our plan is to have a demonstration-scale plant operational by 2010 and, in parallel, we’ll be working on the design and construction of a... MORE

Income distribution, education, health care, and oil prices. David Henderson rushes in where few right-of-center economists dare to tread. He talks about the income distribution. The average number of earners per family for the top quintile is 2.16, almost three... MORE

According to a new Gallup survey, 53% of Americans want price controls on gas. So it looks like the democratic process is failing to deliver the policies the public wants. But wait: 79% of the public opposes gas rationing. Since... MORE

This is a question I asked Robin at today's lunch. Soon afterwards, I learned that AEI just had the first of a series of conferences on this topic, known as "geoengineering":For more than twenty years, policymakers have struggled to find... MORE

Megan McArdle writes, Ryan Avent has been doing some great posting on cap and trade versus carbon taxes. With all information known, the two are theoretically identical. But in the real world they will differ; the question is how much.... MORE

Megan McArdle writes, Certainly, the long-term economic outlook is extremely uncertain, but I’m not sure what “who knows!” is a better answer to cumulatively worsening climate problems than to cumulatively worsening fiscal problems. Her point is that ignoring climate change... MORE

A reader sent me a gated article claiming that Japan's version of the gax tax holiday passed roughly 100% of the savings on to consumers. But I can't find any confirmation on google. Does anyone know anything about this? Links?... MORE

MIT professors on biosolar cells, life extension, and other hopeful technologies. The discussions are extremely terse, and for that reason somewhat unsatisfying. Freeman Dyson writes, in the context of a review of William Nordhaus' book on global warming, I consider... MORE

Peter Orszag writes, because of the long-term nature of climate change, the key issue from an environmental perspective involves the long-term emissions and concentration paths of greenhouse gases, not the year-to-year fluctuations in emissions. The most cost-effective cap-and-trade design would... MORE

Charles Engel writes, The amount of oil pumped out of the ground doesn’t just depend on the current price. If I don’t pump the oil today, I can pump it tomorrow. Tomorrow’s price matters, bubble or no bubble. Let’s start... MORE

Concerning polling results on the issue of global warmaing, Andrew Gelman writes, Among college grads, there is a big partisan divide between Democrats and Republicans. Among non-graduates, the differences are smaller. This is completely consistent with research that shows that... MORE

As expected, Paul Krugman clarifies his thinking. there are only two things you can do with the world's oil production: consume it, or store it. If the price is above the level at which the demand from end-users is equal... MORE

Krugman says that since we're not building up inventories, the high price of oil isn't a bubble:The only way speculation can have a persistent effect on oil prices, then, is if it leads to physical hoarding -- an increase in... MORE

I've finally made the Gray Lady: Today's New York Times features my op-ed inspired by Sunday's post, "I'll Shill for Hillary." I hope critics don't misrepresent me as an economic apostate; I'm not dissenting from the standard analysis, just taking... MORE

According to Iain Murray's new book, the worst disasters come from environmental policy. It is remarkable the magnitude of the harm caused by government relative to the harm caused by the private sector from which it protects us. My co-blogger... MORE

I never thought of these two economists at the same time, until Hamilton called the 2005 Energy Bill "monstrous"!As a result of ethanol subsidies and mandates, the dollar value of what we ourselves throw away in order to produce fuel... MORE

You've probably heard about the famous Simon-Ehrlich wager, but did you know the Ehrlich asked for a rematch? Paul Ehrlich and Steve Schneider proposed to bet $1000 on each on the following:1. The three years 2002-2004 will on average be... MORE

I spell out my conjectures. ScenarioMost Economical TimeframeRemarksCarbon Competition2008-2020Cheapest energy sources, except for political barriersConservation2008-2015Smarter electric grid, better car batteriesNu-cu-lar2013-2030It works, but at what risk?Franken-fuels2020 and beyondThe most likely revolutionSolar Singularity2025 and beyondHope it happens... MORE

Nansen G. Saleri writes, Modern science and unfolding technologies will, in all likelihood, double recovery efficiencies. Even a 10% gain in extraction efficiency on a global scale will unlock 1.2 to 1.6 trillion barrels of extra resources -- an additional... MORE

LiveScience quotes Ray Kurzweil. "It is doubling now every two years. Doubling every two years means multiplying by 1,000 in 20 years. At that rate we'll meet 100 percent of our energy needs in 20 years." Simple. Next problem? This... MORE

The Washington Post reports, Under pressure from agriculture industry lobbyists and lawmakers from agricultural states, the Environmental Protection Agency wants to drop requirements that factory farms report their emissions of toxic gases, despite findings by the agency's scientists that the... MORE

He sums up a lot of information including. the amount of land needed to grow enough food to feed a person has plummeted from about one-and-a-quarter acres in 1950 to about half an acre today. Jesse Ausubel, director of the... MORE

The McKinsey Global Institute likes to beat that drum. They argue that in the U.S. and other developed economies, there is a big opportunity to save energy in lighting. In China and developing regions, the opportunity is more efficient heating... MORE

India News reports, The recent cold wave sweeping across Mumbai and other parts of India could be attributed to global warming, experts said Tuesday here at an environmental conference. Thanks to Sean Corrigan for the pointer.... MORE

Bloomberg reports, Petroleos de Venezuela SA, the state oil company, cut off sales of crude, gasoline and diesel to Exxon Mobil Corp. in retaliation for the freezing of $12 billion in assets in a legal dispute. Two possibilities: 1. Venezuelan... MORE

John Whitehead discusses environmental taboos, including plastic bags and not cleaning up after your dog. Actually, I think that where I live, at least 10 percent of dog-owners do not clean up after their dogs. But I want to raise... MORE

A year ago, I asked:Suppose you surveyed a random sample of Americans with the following question: "Overall, would you rather the climate in the area you live got warmer, got cooler, or stayed the same?"While reading Henderson's encyclopedia, I came... MORE

No, I am not planning that here. It's the name of a new web site, which bears a not-coincidental resemblance to Arts and Letters Daily, an old favorite on our blogroll. Current links include a Time Magazine portrait of Lester... MORE

Ross McKitrick writes, In a greenhouse, movement of air is diminished, so the radiative portion of the energy drain must intensify. Physics can predict with certainty that in order to increase outbound radiation from a greenhouse, temperature inside the greenhouse... MORE

Robert Bryce writes, Fans of energy independence argue that if the United States stops buying foreign energy, it will deny funds to petro-states such as Iran, Saudi Arabia and Hugo Ch¿vez's Venezuela. But the world marketplace doesn't work like that.... MORE

Greg Mankiw writes, As a former energy secretary during the Clinton administration, Richardson has presumably studied these issues. But here he demonstrates extraordinary ignorance (or perhaps extraordinary disingenuousness) about the economic impact of cap-and-trade systems. By contrast, Obama shows extraordinary... MORE

The Financial Post reports, Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade. At the centre of the imminent food catastrophe is corn - the main... MORE

According to an unflattering analysis by Douglas Hoyt, climate models have made 1 correct prediction ("win"), 27 incorrect predictions ("losses"), and 4 predictions that cannot be judged either correct or incorrect ("ties"). Of the models' "losses," the one I consider... MORE

The response to my global warming question has been mostly either bitter denunciation or support, but few answers. However, Anand Gnanadesikan understands what I am looking for. For example, he recommends this paper. This study highlights the role of water... MORE

Before I get to that, here is a BBC rebuttal to climate skeptics. The statement that water vapour is "98% of the greenhouse effect" is simply false. In fact, it does about 50% of the work; clouds add another 25%,... MORE

A new economics blogger is really keen to hike the gas tax. You may criticize the high-tax ways of Europe, but here the latter is dead right: with taxes at $5-6 a gallon, they are about right in pricing the... MORE

The nonsense comes from Robert Zubrin The only way to break the monopoly on the vehicle fuel supply currently held by OPEC is through legislation. Congress should require that all future vehicles sold in the United States be flexible-fueled, capable... MORE

James Hamilton see hope. these numbers convince me that we are likely to see a significant increase in production in 2008, and an economic downturn would surely produce a drop in demand. I'm standing by the assessment I offered last... MORE

I'm not sure why I never came across this site before. It expresses views that are quite close to mine. For example, The modelers begin with certain assumptions about climate that they build into the model. For example, the computers... MORE

Mathematician David Evans writes, After further research, new high-resolution ice core results (data points only a few hundred years apart) in 2000–2003 allowed us to distinguish which came first, the temperature rises or the CO2 rises. We found that temperature... MORE

Former frequent commenter General Specific writes, In a subsequent post, I'll consider each of these issues in more detail. In the mean time, Wikipedia has a page up on this topic. And in particular, consider the case of Carl Wunsch,... MORE

Bryan writes, isn't Arnold's standard of scientific evidence strangely strict? Few results in economics rest on an "experiment or a naturally-occurring event where the results are extremely unlikely to occur unless X is true." I thought I was simply stating... MORE

Katy of Sybil's Star posts The Great Global Warming Swindle, a counter-documentary on Global Warming. It comes across as very persuasive, but I take the view that you can make a persuasive propaganda film for just about any position on... MORE

Here's a gem of ridicule from my colleague Russ Roberts. The National Academy of Sciences reports that divorce is bad for environment, because singles use more resources than couples. Russ exposes this "finding" as a bizarre combination of the obvious... MORE

Some recent stories about solar power. 1. Solar concentration technology: A new mechanism for focusing light on small areas of photovoltaic material could make solar power in residential and commercial applications cheaper than electricity from the grid in most markets... MORE

Fortune Magazine reports on Al Gore joining the venture capital firm Kleiner-Perkins: "What we are going to have to put in place is a combination of the Manhattan Project, the Apollo project, and the Marshall Plan, and scale it globally,"... MORE

Ricardo Hausmann writes, Rodrigo Wagner and I have estimated that there are some 95 countries that have more than 700m hectares of good quality land that is not being cultivated. Depending on assumptions about productivity per hectare, today’s oil production... MORE

I took a lot of notes on 4 talks given at "MIT on the Road." Unlike the Valley Guys, who think that four new JavaScript function calls constitutes an economic revolution, the MIT folks had lots of interesting things to... MORE

Terry J. Fitzgerald in the Minneapolis Fed Review: Fringe benefits have become an increasingly important part of employee compensation over the past 30 years. The BLS estimates that benefits currently account for about 30 percent of employer costs for employee... MORE

Yes, I'm an elitist: When laymen and experts disagree, my presumption is that the laymen are wrong and the experts are right. Whether the subject is economics, toxicology, or global warming, that's my starting point (though not always my ending... MORE

Megan McArdle points to Scott Adams At the risk of oversimplifying, our current energy policy in The United States involves shooting bearded people. At the risk of stepping on a funny line, I would say that our energy policy is... MORE

Megan McArdle discusses the issue of whether urban hipsters or suburban ticky-tackies have the more carbon-intensive lifestyle. This is one of those questions for which the answer is too difficult to calculate. For example, there was a story making the... MORE

Olivier Blanchard and Jordi Gali write, Since the 1970s, and at least until recently, macroeconomists have viewed changes in the price of oil as as an important source of economic fluctuations, as well as a paradigm of a global shock,... MORE

From a Wall Street Journal story: The biggest political battle in Washington over climate change may not pit Democrats against Republicans. Instead, it could be economists versus politicians. Many academics, even conservatives, favor a tax on carbon emissions. Many lawmakers,... MORE

He writes, The warming effect of carbon dioxide is strongest where air is cold and dry, mainly in the arctic rather than in the tropics, mainly in mountainous regions rather than in lowlands, mainly in winter rather than in summer,... MORE

Jerry Taylor and Peter Van Doren write, some observers have argued that if gasoline taxes were increased and other taxes decreased so that overall revenue remained constant, a gasoline tax hike would provide a “double dividend.” That is, it would... MORE

When Democratic candidates were asked, "What would you do to reduce gas prices?," their answers made very little sense. Which brings me to a Jeopardy-inspired puzzle: If those were their answers, what question were they really answering? To what policy... MORE

Democratic candidates were asked "What would you do to reduce gas prices?" Their answers, with one exception, should make any economist wince. Here's Dodd, who leads with a long-winded complaint about foreign energy dependence and global warming, and ends with:I've... MORE

Michael Cannon describes how the self-selection process in politics works against my ideas for reforming health care. “Insulation” is another term for spending Other People’s Money. Politicians are predisposed not to see spending Other People’s Money as a problem, because... MORE

Kevin Hassett writes If you want some action in the next few years, you can operate in existing markets. If you want to buy the right to sell your alternative fuel for the equivalent of $70 at any time in... MORE

James C. McWilliams writes, For many purposes that are well demonstrated with present practices, AOS models are very useful even without the necessity of carefully determining their precision compared with nature. These models are structurally unstable in various ways that... MORE

In the past, I've asked people if they would prefer their climate to be warmer, cooler, or about the same, and reported that a straw poll of my undergrads leans in a pro-warmer direction. Now a new NBER paper strikingly... MORE

Evidently, there is a company offering a solution to CO2. It is called Planktos. Our primary focus is to restore damaged habitats in the ocean and on land. Through iron-stimulated plankton blooms in the oceans and afforestation projects in Europe,... MORE

The U.S. Department of Energy reports, Acciona Energy announced on June 7th that Nevada Solar One, a 64-megawatt solar thermal power plant near Boulder City, Nevada, is now online. The new facility is the largest of its type to be... MORE

I emailed Scott Armstrong my questions about his climate change bet, and he graciously responded:The bet is about the size of the forecast errors, not about direction. There are better ways of designing a competition. I had to go for... MORE

Armstrong has just offered Al Gore a $US20,000 ($23,000) bet that the Intergovernmental Panel on Climate Change temperature forecasts are wrong.This passage intrigued me. What counts as "being wrong"? Here's what I learned at the bet's official website:Scott Armstrong of... MORE

Michael Duffy writes, Professor Scott Armstrong is at the Wharton School at the University of Pennsylvania. Dr Kesten Green is with the Business and Economic Forecasting Unit at Monash University. They're experts in forecasting techniques... Armstrong and Green looked at... MORE

A sharp post by David Friedman:One argument is that we are running out of hydrocarbons and should therefore reduce our use of hydrocarbons, reduce energy consumption and switch to alternative energy sources. The other argument is that we are, by... MORE

Some pretty reasonable remarks by Tyler about the future of Tyson's Corner provoked a remarkably angry set of comments. When I first moved to Virginia ten years ago, I lived across the street from Tyson's II, and Tyler lived in... MORE

"Recycling is the philosophy that everything is worth saving except your time" - I still don't know who coined the quip, but I repeat it every chance I get. If that's not enough for you, though, here's Mike Munger on... MORE

He writes, We can imagine that in the future, when we have mastered the art of genetically engineering plants, we may breed new crop plants that have leaves made of silicon, converting sunlight into chemical energy with ten times the... MORE

Ross McKitrick writes climate models predict that, if greenhouse gases are driving climate change, there will be a unique fingerprint in the form of a strong warming trend in the tropical troposphere, the region of the atmosphere up to 15... MORE

Robert Haddick writes, Unless China, India, and other rapidly expanding economic centers in the developing world fully participate in greenhouse gas reduction efforts, regulatory schemes in the west will simply displace economic activity from the "clean" developed world to the... MORE

Arnold also writes: Pearce himself said, and I agree, that skepticism about climate models should increase one's concern about both tails. That is, the models may under-predict global warming. In fact, that is my number one concern with the issue.... MORE

First, there is Larry Summers. Those who still deny that human activity is warming the planet, or claim that “business as usual” can continue indefinitely without profoundly adverse consequences, are increasingly seen as the moral and intellectual equivalent of those... MORE

David A. Shaywitz reviews Nassim Taleb's views on randomness. The problem, insists Mr. Taleb, is that most of the time we are in the land of the power law and don't know it. Our strategies for managing risk, for instance--including... MORE

Today, the high school where I teach had an "environmental awareness" seminar. I walked in during the middle, so I did not catch the woman's name. The kids said that she had worked with Al Gore, and that many of... MORE

A sign that the Pigou Club is gaining traction is that the Washington Post has an article called Tax on Carbon Emissions Gains Support that does not mention Greg Mankiw. The article does, however, quote some real, um, knowledge-challenged people... MORE

Which do you think has higher priority? The Financial Times reports, A European summit agreed to toughen regulations against old-fashioned incandescent bulbs by 2009 as part of a bid to cut greenhouse gas emissions. But earlier in the week officials... MORE

A blogger writes If consuming less bad energy is a goal, then moving more citizens over to good energy is a viable part of that goal. To move more people over to good energy, there has to be more readily... MORE

In this essay, I put together some recent ideas. Subsidizing "good" energy in order to justify using "bad" energy is like eating salad in order to justify eating dessert. It is an exercise in self-deception. ...The most important, inconvenient truth... MORE

The Wall Street Journal writes, The emerging alliance of business and environmental special interests may well prove powerful enough to give us cap-and-trade in CO2. It would make Hollywood elites feel virtuous, and it would make money for some very... MORE

I've already defended blanket skepticism about supposedly impending disasters. Here's a neat essay by Max More defending a "Proactionary Principle" against the far more popular "Precautionary Principle." Intro: "We can call this “the” Proactionary Principle so long as we realize... MORE

Mark Thoma writes, Here's what I've noticed. Some of the same people who argue there's too much uncertainty about the climate 75 years in the future to justify drastic action now use the so-called crisis in Social Security funding 75... MORE

My latest essay: Weitzman implicitly shares my concern with climate models. Obviously, we have nothing to worry about if the models are too pessimistic. If it turns out that over the next decade global temperatures edge down, or rise more... MORE

I love Martin Weitzman's paper. From his conclusion: On the political side of the Stern Review, my most-charitable interpretation of its urgent tone is that the report is an essay in persuasion that is more about gut instincts regarding the... MORE

Jonah Goldberg writes, Earth got about 0.7 degrees Celsius warmer in the 20th century while it increased its GDP by 1,800 percent, by one estimate. How much of that 0.7 degrees can be laid at the feet of that 1,800... MORE

Shame on Reason for giving us this essay on "terror-free" oil. I usually give Citgo a pass because most of the company's profits wind up on the hands of the Venezuelan government, headed by the socialist, Castro-loving, anti-globalization, and virulently... MORE

Mark Bahner writes, The U.S. government should set up a prize fund totaling $400 million, payable in 2031. The prize fund would be open to any U.S. university with accredited science or engineering programs. The fund would be awarded as... MORE

Also in the Milken Institute Review, Jerry Taylor and Peter Van Doren write, A comprehensive study recently published by the nonpartisan International Institute for Sustainable Development estimates that federal and state subsidies for ethanol in 2006 were somewhere between $5.1... MORE

I thought that the most disagreeable part of the Bush State of the Union Address was on energy. If you want to reduce gasoline consumption by 20 percent, then join the Pigou club and tax gasoline. If you assume that... MORE

Robert M. Carter, et al write, peer review is both too inbred and insufficiently thorough to serve any audit purpose, which we believe is now essential for science studies that are to be used to drive trillion-dollar policies. The authors... MORE

'Jane Galt' writes, As I read it, the Stern Report basically assumes that there are low diminishing returns to income (it sets the elasticity of marginal utility of consumption, or η, to 1). It strikes me as odd to see... MORE

Ron Bailey writes, 77 percent of the world’s known oil reserves are in the hands of state-owned oil companies. Such “companies” do not respond with alacrity to market signals and so are under-investing in new production technologies and even in... MORE

James Surowiecki writes, Unfortunately, the ethanol produced in the U.S. comes from a less-than-ideal source: corn. Corn ethanol’s “net energy balance”—the amount of energy it yields in proportion to how much energy goes into its production—is significantly lower than that... MORE

He wrote, According to [William] Nordhaus, the assumptions used in the Stern Review imply that per capita yearly consumption in 2200 will be $94,000 as compared with $7,000 today. So, is it really ethical to transfer wealth from someone making... MORE

On the question of choosing a discount rate to determine the cost of global warming, Brad DeLong chimes in. A consumption-to-output ratio of 77.5% is far from absurd, and so Dasgupta's critique of Stern fails. His mistake is in failing... MORE

Concerning the discount rate assumptions used in the Stern climate review, Partha Dasgupta writes, suppose, following the Review, we set delta [the rate of subjective time preference] equal to 0.1% per year and eta [the elasticity of marginal utility with... MORE

A number of readers have sent in links to articles suggesting that climate engineering may be feasible. For example, T.M.L. Wigley writes, Future climate change may be reduced through mitigation (reductions in greenhouse gas emissions) or through geoengineering. Most geoengineering... MORE

I elaborate on the idea of using man-made climate change to fight climate change, whether man-made or not. Climate engineering, or what I call Operation Sunscreen, would mean trying to alter the heat absorption properties of the atmosphere. The goal... MORE

The latest analysis is known as the Stern report. From chapter one, on climate science: Climate models use the laws of nature to simulate the radiative balance and flows of energy and materials. These models are vastly different from those... MORE

Paul Romer writes, Greg Mankiw correctly points out that the tax in Prop 87 is not a Pigovian tax--that is, a tax on oil for the purpose of reducing oil consumption to socially optimal levels. However, the revenues from Prop... MORE

John Baden writes, First, the energy content of ethanol is low when compared with gasoline or diesel. While diesel contains around 140,000 Btu per gallon, and gasoline 115,000 Btu, denatured ethanol contains only 78,000 Btu per gallon. We can’t cheat... MORE

He writes, We should raise the tax on gasoline. Not quickly, but substantially. I would like to see Congress increase the gas tax by $1 per gallon, phased in gradually by 10 cents per year over the next decade. He... MORE

Lester B. Lave and W. Michael Griffin write, Brazil, together with some Caribbean nations, is exporting some 200 million gallons of ethanol to the United States annually. But the United States doesn’t make it easy. Brazil pays a 2.5% duty... MORE

California's latest crazy initiative helps James Hamilton get in touch with his inner Bastiat: The only reason I can imagine for a specific tax on California oil producers is the apparent belief by the proponents of the tax that these... MORE

Don Boudreaux writes, But I do discard paper plates - for the same reason I recycle my china rather than discard it: it would be wasteful to do otherwise. After all, I could recycle paper plates. Careful washing would enable... MORE

N. Scafetta and B.J. West write, We find good correspondence between global temperature and solar induced temperature curves during the pre-industrial period such as the cooling periods occurring during the Maunder Minimum (1645–1715) and the Dalton Minimum (1795–1825). The sun... MORE

Dan Lewis writes, Even if we [in Europe] succeed in making big cuts in carbon emissions, these would not include the pollution created by imports. This is the accounting flaw at the heart of the Kyoto treaty. Globalization means energy-intensive... MORE

Richard S. Lindzen writes, Even if we attribute all warming over the past century to man made greenhouse gases (which we have no basis for doing), the observed warming is only about 1/3-1/6 of what models project. His point is... MORE

I am reading Frederick Crews' The Follies of the Wise, which collects essays he has written over the years attacking creationists, UFO believers, Freudians, and others. The common thread is his unrelenting empiricism. Greg Mankiw exposed my skepticism on Global... MORE

Greg Mankiw asks everyone to join what he calls The Pigou Club, by which he means economists who favor carbon taxes or gasoline taxes. The idea is that instead of taxing stuff that we want more of--work, saving, risk-bearing--we should... MORE

J.S. at Environmental Economics writes, We all are aware of the well-funded campaigns to discredit the science of global warming, and I’m the last one who wants to add more uncertainty to the mix. He points to this set of... MORE

Patri Friedman has written the most interesting thing I've read on global warming in years: I think humans naturally tend to a more anthrocentric viewpoint, where civilization arose because we had evolved enough to create it. It is fascinating and... MORE

If you want to reduce gasoline consumption or carbon emissions, should you use a tax or tradable rights? Martin Feldstein argues for tradable gasoline rights (TGR's). The government would decide how many gallons of gasoline should be consumed per year... MORE

A new study says Three top climate researchers claim that the greenhouse gases already in the atmosphere should have warmed the world more than they have. The reason they have not, they say, is that the warming is being masked... MORE

Here are a couple of more references on decarbonization: John Whitehead shows a trend decline of about 2 percent per year in the U.S.(we are decarbonizing faster than most of the world). Jesse Ausubel (last chart) shows a graph which,... MORE

What accounts for the relationship between total world GDP and world average temperature? For background, here is some data on GDP, from chapter 5 of Brad DeLong's Macroeconomics textbook (I did the multiplication to get the last column). yearworld population... MORE

An explanation of Oil Econ 101. Only drastic reductions in U.S. oil use would lead to elimination of oil imports. Until then, the United States will continue to import oil. And U.S. consumers will pay the world price for oil,... MORE

I can't believe that Bryan wrote about people getting upset about high gas prices without mentioning anti-market bias. This is the perfect example of the public thinking that high prices are due to an outbreak of excess greed (profits are... MORE

I try to explain energy policy so that even a TV talking head might understand. Let's go s-l-o-w-l-y. Start by asking yourselves these questions: * Should the goal of U.S. energy policy be to raise long-term domestic energy production, or... MORE

The Reuters story says Senate Republicans unveiled a proposal on Thursday to soften the blow of rapidly rising gasoline prices by suspending a retail fuel tax and paying for the lost revenue by also suspending some oil industry tax breaks.... MORE

The Competitive Enterprise Institute used a recent Time Magazine cover story as a stimulus to give the non-alarmist view on global warming. Obviously, CEI has a particular viewpoint, but there are a lot of facts presented, so it seems to... MORE

James Hamilton summarizes and comments on a blog discussion of the fact that oil futures prices are high relative to spot prices. He writes, There is currently very little spare capacity in global oil production, meaning that a supply disruption... MORE

Mark Thoma writes, Paul Krugman tackles the trashing of science by oil companies, Exxon in particular, to cloud research pointing to global warming. He quotes from the Krugman piece, which appears to be a typical type M argument. At the... MORE

David Friedman re-explains Hotelling's analysis of natural resources, then argues that - due to insecure property rights - Hotelling's rule underestimates how fast prices will rise: Suppose I own underground oil, but I believe there is a substantial chance, say... MORE

From the Economic Report of the President's energy chapter: Prices on contracts for future deliveries of crude oil (called crude oil futures) indicate that market participants expect oil prices to remain elevated at or near current levels through at least... MORE

Robert Zubrin writes Congress could make an enormous step toward American energy independence within a decade or so if it would simply pass a law stating that all new cars sold in the U.S.A. must be flexible-fuel vehicles capable of... MORE

Forget Oil Econ 101. Steven Pearlstein writes that the President's State of the Union rhetoric about energy independence, cars running on alternative energy and ending our addiction to Mideast Oil -- that could have come straight from the mouth of... MORE

Marc Sumerlin writes, The market for long-dated oil futures contracts is not sufficiently large or liquid enough to fully and inexpensively hedge the vast quantity of investment that is needed for the U.S. to substantively reduce its dependency. Hedging is... MORE

When I was finishing up my book on voter irrationality, I had a lot of trouble tracking down any quotes confirming my belief that economists roughly buy into Julian Simon's views on the benefits of population. In the end, I... MORE

In the September American Economic Review, Ian W. H. Parry and Kenneth A. Small write, The British government has defended high gasoline taxes on three main grounds. First, by penalizing gasoline consumption, such taxes reduce the emissions of both carbon... MORE

Andrew Samwick points to a paper by Jayanta Sen that suggests that it is in the interest of oil consuming nations to tax oil. Sen writes, a tax on crude would transfer wealth of $100+ billion a year from foreign... MORE

Bryan thinks that Iraq is the victim of Carter-era energy policy. But we in the United States have no reason to feel secure from such economic idiocy. James Hamilton notes that energy legislation now under consideration wants to punish price-gouging,... MORE

Anthony de Jasay writes, Some miracle of an unexpected kind will very likely occur one day to make some renewable energy source economical, but until it does, responsible oil companies will make haste slowly toward biomass, solar or wind power... MORE

James Hamilton expresses doubts about oil shale. The fact that large quantities of heat are required to obtain a usable fuel from the rock means that this is a far less efficient source of energy than conventional oil. Shell claims... MORE

Lots of economists in the blogosphere have been arguing about the effects of cutting gas taxes on the price of gas. Here's James Hamilton's summary, which ends with the following: [E]lasticities are never really zero, and are easy to underestimate... MORE

In my latest essay, I write, While I have little faith in individual corporations, I have more faith in decentralized market processes. For example, although I have no admiration for any oil company in particular, I believe that we will... MORE

Alex Tabarrok chides the man-in-the-street for believing that cutting gas taxes will cut gas prices: Does the lifting of the tax change the demand for gasoline? No. Does it change the physical supply? No. At least not by much in... MORE

With the whole country bemoaning the rise in the average price of gas, a far more economically surprising change has been almost overlooked: The massive rise in the variance of the price of gas. Before the hurricane, the spread between... MORE

From a RAND study: The largest known oil shale deposits in the world are in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming...For potentially recoverable oil shale resources, we roughly derive an upper bound of 1.1... MORE

The first place I went for an economic assessment of the impact of Hurricane Katrina was James Hamilton's www.econbrowser.com, because of his expertise in energy. I was not disappointed. For example, he wrote, One of the questions I am almost... MORE

In the spirit of the original Simon-Ehrlich bet, people who disagree about the long-run price of oil are putting their money where their mouth is. According to the Laissez-Faire Books blog, energy expert Matthew Simmons has bet NYT columnist John... MORE

Lots of blather going around the blogosphere about gas prices and fuel efficiency. Most of it violates Oil Econ 101. Perhaps the most reasonable blog take is by Andrew Samwick. The aspect of SUVs that does annoy me is that... MORE

Terrific econoblog featuring James econbrowser Hamilton and Robert (what, no blog?) Kaufmann on long-term oil supply and policy issues. Hamilton writes, If you ask people today to make huge sacrifices that later turn out to be unnecessary or to be... MORE

is still in the future, according to Daniel Yergin. There will be a large, unprecedented buildup of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil (not actual production) could grow by 16 million... MORE

Alan Reynolds writes, Ethanol already gets an indefensible tax break at the pump of 51 to 71 cents a gallon, but Congress now wants to compel everyone to add it to their tanks. But doing so would leave us with... MORE

According to James Hamilton, The sustained run-up in oil prices has coincided with a large increase, not decrease, in world oil production. World oil production had previously fallen off in response to the lower demand brought about by the recession... MORE

Lots of good stuff recently at Knowledge Problem. Lynne tells us what to think of the new energy legislation. If you support a forward-looking, dynamic, creative, innovative approach to energy, this is not the legislation for you. If you are... MORE

Randall Parker recently sent an email to a few economics bloggers about nuclear power plant regulation. In particular, he asked whether we think that the Price-Anderson Act, which limits the liability of nuclear power plants for accidents, represents an excess... MORE

As late as 1999, it was our single largest foreign supplier of oil. But then a hostile regime took over, struck up close friendships with our bitter enemies, and started strangling our economy. By 2003, it had cut its exports... MORE

The Cincinnati Enquirer writes, How can prices climb so much, seemingly overnight, when the gasoline in the tank beneath the station was bought by the retailer a day or two before and was probably refined from crude oil weeks or... MORE

I presume that Alan Greenspan is a relatively well-informed observer. Clearly, limited substitution possibilities across fuels have resulted in persistent cost differentials, but those very differentials inspire the technologies that, over time, reduce such limitations. A clear example is gas-to-liquids... MORE

The Washington Post reports, A who's who of right-leaning military hawks -- including former CIA director R. James Woolsey and Iraq war advocate Frank J. Gaffney Jr. -- has joined with environmental advocates such as the Natural Resources Defense Council... MORE

There's a reason why Bjorn Lomborg has been rewarded for writing The Skeptical Environmentalist with a pie in the face. The book's good, very good - and that's bound to anger the touchy, gloomy Greens he's debunking. The book has... MORE

In this essay, I argue that energy conservation is not a useful tool of foreign policy. In my view, the worst policy option of all is to subsidize the use of alternative forms of energy. If other forms of energy... MORE

Robert Bryce wrote, Many of the leading neoconservatives who pushed hard for the Iraq war are going green. James Woolsey, the former director of the Central Intelligence Agency and staunch backer of the Iraq war, now drives a 58-miles-per-gallon Toyota... MORE

Global warming is the topic this week discussed by Richard Posner and Gary Becker. Posner writes, [The Kyoto Protocol] is either too much or too little. It is too much if, as most scientists believe, global warming will continue to... MORE

Ronald Bailey reports, Nanotechnology would make it possible for 100 billion people to live sustainably at a modern American standard of living, while indoor agriculture using high-efficiency inflatable ten-pound diamond greenhouses would help restore the world's ecology. The ultimate limit... MORE

A company called CNW marketing research offers a timely study, as reported on CNN Money. It would take gasoline prices hitting a sustained $2.75 a gallon to get 19 percent of those surveyed thinking about a more fuel-efficient vehicle; another... MORE

Are high oil prices a temporary spike, caused by the evil oil cartel? Or are they a reflection of dwindling oil supplies? I'd like to hear from Lynne Kiesling on this. Meanwhile, here are my hunches. First of all, I... MORE

The Washington Post's Steven Pearlstein needs to learn the difference between marginal cost and average cost. Without some miracle breakthrough like controlled fusion, energy independence is unattainable, probably undesirable and discussion of it avoids the real question of why the... MORE

Any time a price increases rapidly, somebody argues that there is a bubble (although I have not heard anyone proclaim a health care bubble). Here is Frank P. Leuffer on oil. IEA figures for the first half of the year... MORE

Joe Katzman has a long, thoughtful post on the economics of common resources, notably water. Perhaps it's also time to factor these eco-services into a variant of GNP, so their depletion and restoration would both show on a national balance... MORE

Richard Smalley writes, Consider, for example, a vast interconnected electrical energy grid for the North American continent. By 2050 this grid will interconnect several hundred million local sites. There are two key aspects of this future grid that will make... MORE

Michael Lind offers an optimistic assessment of the prospects for sustaining a world population of 9 billion. As affluence grows, the amount of energy and raw materials "consumed" by machinery will escalate even more rapidly than human consumption. But this... MORE

George Will quotes Cafe Hayek's Russ Roberts' pistachio example. Of course, oil supplies are, as some people say with a sense of profound discovery, "finite.'' But that distinguishes oil not at all from land, water or pistachio nuts. Russell Roberts,... MORE

Jane Galt writes, High inflation was the result of a dozen years of bad fiscal and monetary policy under two Republicans -- Nixon and Ford -- and two Democrats -- Johnson and Carter -- that was brought under control only... MORE

David Ignatius is pro: The best plan I've seen for doing the politically impossible comes from an energy economist named Philip Verleger. ...Verleger favors what he calls a "prospective gasoline tax," which would allow the country four years to get... MORE

I summarize my thinking about the Strategic Petroleum Reserve in an essay. I am not persuaded that the "convenience yield" of the SPR justifies its costs. However, even if it does, I believe it makes sense to have a rule... MORE

As of May 20th, the June 2004 futures contract for light crude oil was at $41.66, while the June 2005 futures contract was at $35.58. When futures prices are below spot prices, this is known as "backwardation." I believe that... MORE

It's not just Democrats. National Review Online's James S. Robbins writes, A strategic plan for secure and sustained energy would have many elements — shifting imports to more stable, friendlier countries, exploiting more domestic resources, pursuing alternative energy sources, and... MORE

In forecasting oil prices, I tend to defer to the efficient markets hypothesis. In some sense, oil in the ground has to compete with bonds and other interest-bearing assets. So, a reasonable approximation is that oil prices should be expected... MORE

Lynne Kiesling and Don Boudreaux have already pointed to an article by Morris Adelman, who was at MIT back when Krugman and I were in grad school there. There is not, and never has been, an oil crisis or gap.... MORE

I really like Edward Lotterman's latest. No one studies elasticities of demand for oil more than OPEC. Its leaders know that in the very short term — i.e., a few weeks or months — a 10 percent price hike may... MORE

Earlier, I posted on the Strategic Petroleum Reserve. Nick Schulz has some more on the gas price issue. Ketchup at a retail grocery store is $0.16 an ounce meaning it rings in at an impressive $20.48 a gallon, almost ten... MORE

With oil prices high, should the Strategic Petroleum Reserve be reduced? Steve Antler criticizes John Kerry for making such a suggestion. In contrast, Fred Singer has called the Strategic Petroleum Reserve, a wasteful effort by government to protect against an... MORE

Lynne Kiesling writes, our water use has not gone up in 20 years. If we paid prices for water that reflected the true cost of its use, and if farmers could transfer their property rights over water to non-agricultural users,... MORE

My view of environmentalists is that they use the fixed-coefficients production function for long-term forecasting. Thus, they ignore substitution and technological change. Ronald Bailey reviews the many mistaken predictions based on this methodology. For example, For the first Earth Day... MORE

I once wrote an essay that I called The Great Race, in which I argued that two factors that affect the future are technological change in the private sector and the growth of entitlement spending. Many posts in this blog... MORE

Lynne Kiesling, who believes that rent-seekers should be prosecuted, is in an accusatory frame of mind concerning the latest energy legislation. She writes, choosing to expand ethanol mandates as a renewable energy initiative is a big mistake. Using more ethanol... MORE

Lynne Kiesling and Vernon Smith explain peak-load pricing to the new governor of California. current policy unfairly forces consumers to pay rates based on the average hourly cost of energy and industry capital investment. As a result, peak utility cost... MORE

Holman Jenkins makes some useful points. nowadays U.S. consumption of Persian Gulf oil totals about $18 billion a year, less than we spend on computer parts from Asia. The price mechanism works: Oil would flow in greater volume from higher-cost... MORE

As a dean at Berkeley, Hal Varian has a personal interest in California. In his column today, he offers some plain-spoken economics lessons. Most California voters think the electricity crisis contributed to the state budget deficit. If only things were... MORE

On the subject of the environment and technology, D-squared writes, Future generations cannot make contracts with us, so their preferences about the rate of extraction don't figure in the market price. Suppose that the desire for ivory threatens to make... MORE

Jonathan Rauch says that agriculture tends to abuse the environment. The trade-offs are fundamental. Organic farming, for example, uses no artificial fertilizer, but it does use a lot of manure, which can pollute water and contaminate food. Traditional farmers may... MORE

How should the location of undesirable land uses, such as toxic waste dumps or prisons, be determined. Citing Julian Simon, Herbert Inhaber suggests using a reverse auction, in which the Federal government offers to compensate local residents for living near... MORE

In the wake of the electricity blackout, I have been disappointed that economists have contributed more noise than signal in their comments. For example, Paul Krugman wrote, Under the old regulatory system, power companies had strong incentives to ensure the... MORE

Randall ("FuturePundit") Parker takes down hydrogen cars by pointing to a number of scientific studies. The biggest problem with hydrogen as a means to reduce pollution is that it has to be produced from another energy source and the most... MORE

I may have been on vacation for over a week, but the site was active with comments. On the limits-to-growth thread, Harold wrote, Less land is required for agriculture every year. Even less would be if so many governments would... MORE

Bjorn Lomborg and Olivier Rubin have an article that concisely challenges the thesis that environmental limits to growth are binding. [the limits-to-growth argument's] real weakness is the underlying assumption that planet Earth has finite, essential resources (such as oil, water,... MORE

Charles Krauthammer's premise, that reducing demand for oil will reduce terrorism, violates what I call Oil Econ 101. But he does offer the least costly way to achieve the goal. Slap, say, a $5 (or $10--the bazaar is open) tax... MORE

Lynne Kiesling points to this article by Joel Schwartz on the ethanol mandate. what if our elected officials ... forced you to pay $180 more each year for gasoline that contains an antiquated additive you don't need, and that could... MORE

I once wrote an essay called Oil Econ 101, in which I argued that while we can lower our consumption of oil, that would not reduce our dependence on Saudi oil. Ram of postpolitics.com suggested I might want to comment... MORE

Could California suffer another "energy crisis?" Lynne Kiesling writes, California has a lower construction rate for proposed generation projects than other states that have implemented electricity restructuring...even in states that started with higher capacity relative to demand, such as Texas... MORE

Lynne Kiesling bemoans electricity regulation policy in California. [The original deregulation effort] was much more about freeing up restrictions on trade in wholesale electricity markets, although it did a pathetic job of that, requiring buyers and sellers to use the... MORE

In the thread about capitalism as a benevolent system, Ward mused, Maybe there should be a school of Austrian Environmentalism that studies innovative ways to clean up or maintain the environment. To which Lynn Kiesling replied, one organization that does... MORE

Discussing a forthcoming study of air pollution by Joel Schwartz, Ronald Bailey writes, For example, [Schwartz argues that] a proposal to raise the prices of conventional cars and use the extra money to lower the prices of electric cars—which are... MORE

How can we deal with the problem that unrestricted access to fish leads to over-fishing? This is almost a textbook exercise in Coase economics. One solution is fish farming, in which a business owns the fish that it breeds in... MORE

Lynne Kiesling quotes an engineering analysis of hydrogen as a fuel source for automobiles. I can assure you that there is no way that spending heat energy to make hydrogen to be burned to make heat energy can be anything... MORE

Lynne Kiesling has written a five-part article on hydrogen fuel cells. She looks at technical issues as well as economic issues, and each part in the series offers insightful analysis. The last installment questions the wisdom of the Bush Administration's... MORE

At the fascinating Longbets web site, Robert A. Freling of the Solar Electric Light Fund makes this bet: By the year 2020 solar electricity will be as cheap or cheaper than that produced by fossil fuels I wish that environmentalists... MORE

Gregg Easterbrook lets a lot of the air out of the hydrogen balloon. Pure hydrogen is not an energy source, except to stars. As it will be used in cars or to power homes and offices, hydrogen--like a battery--is an... MORE

About a year ago, Paul Romer pointed out that In the next century we’re going to be moving back and forth, experimenting with where to draw the line between institutions of science and institutions of the market. In this context,... MORE

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